HF 5144

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/25/2024 02:51pm

A bill for an act
relating to taxation; property; modifying requirements for class 4d(1) low-income
rental housing; amending Minnesota Statutes 2023 Supplement, section 273.128,
subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2023 Supplement, section 273.128, subdivision 1, is amended
to read:

Subdivision 1.

Requirement.

(a) Low-income rental property classified as class 4d(1)
under section 273.13, subdivision 25, is entitled to valuation under this section if at least
20 percent of the units in the rental housing property meet any of the following qualifications:

(1) the units are subject to a housing assistance payments contract under Section 8 of
the United States Housing Act of 1937, as amended;

(2) the units are rent-restricted and income-restricted units of a qualified low-income
housing project receiving tax credits under section 42(g) of the Internal Revenue Code;

(3) the units are financed by the Rural Housing Service of the United States Department
of Agriculture and receive payments under the rental assistance program pursuant to section
521(a) of the Housing Act of 1949, as amended; or

(4) the units are subject to rent and income restrictions under the terms of financial
assistance provided to the rental housing property by the federal government or the state of
Minnesota, or a local unit of government, as evidenced by a document recorded against the
property. new text begin The restrictions under this clause must require assisted units to be occupied by
residents whose household income at the time of initial occupancy does not exceed 60
percent of the greater of area or state median income, adjusted for family size, as determined
by the United States Department of Housing and Urban Development. The restriction must
also require the rents for assisted units to not exceed 30 percent of 60 percent of the greater
of area or state median income, adjusted for family size, as determined by the United States
Department of Housing and Urban Development.
new text end

deleted text begin The restrictions must require assisted units to be occupied by residents whose household
income at the time of initial occupancy does not exceed 60 percent of the greater of area or
state median income, adjusted for family size, as determined by the United States Department
of Housing and Urban Development. The restriction must also require the rents for assisted
units to not exceed 30 percent of 60 percent of the greater of area or state median income,
adjusted for family size, as determined by the United States Department of Housing and
Urban Development.
deleted text end

(b) The owner of a property certified as class 4d(1) under this section must use the
property tax savings received from the 4d(1) classification for one or more of the following
eligible uses: property maintenance, property security, improvements to the property, rent
stabilization, or increases to the property's replacement reserve account. To maintain the
class 4d(1) classification, the property owner must annually reapply and certify to the
Housing Finance Agency that the property tax savings were used for one or more eligible
uses.

(c) In order to meet the requirements of this section, property which received the 4d(1)
classification in the prior year must demonstrate compliance with paragraph (b).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2025.
new text end